Matching A local pizza delivery truck driver has been offered the opportunity to buy her own delivery truck and deliver pizza at a higher commission than the one received when using the company truck. She knows that the cost of her truck has to be included in deciding whether it would be best to own her own truck. She puts together the following information:

a. Explain briefly how the cost of the truck can be matched to her future revenue from deliveries.

b. Prepare a simple schedule that illustrates this matching.

c. Would this matching be done at the end of a month or year as an adjustment or recorded as a daily expense of operations? Explain.

Transcribed Image Text:

Cost of delivery truck, fully equipped Average life of delivery trucks Average commission and tips for each delivery with a company truck Average commission and tips for each delivery with a privately owned truck Average number of deliveries per week $20,000 5 years $3.00 $5.00 100